'We do not punch above our weight – we are punching ourselves'

BUSINESS INTELLECTUAL: I interview Magda Wierzycka about communist Poland, revelations from the Zondo commission, AI's impact on jobs, BRICS, and her advice for the South African president

This is the fifth interview on Our Long Walk, my blog about the past, present, and future of South Africa. I'll be talking with South African business leaders to gain their perspectives on the lessons from history. Previous interviews were with André de Ruyter, Herman Mashaba, Jannie Durand, and Paul Clüver. Please consider a paid subscription to access the full interview and all of my twice-weekly content, including columns, guest essays, and summaries of the latest relevant research.

Magda Wierzycka co-founded Sygnia Ltd, a financial services company, and Braavos Investment Advisors, an early- to growth-stage venture capital firm.

1. In your book Magda: My Journey you talk a lot about your childhood in communist Poland and the revisionist history taught at school. What do you worry about with regard to an incomplete historical education? Why is an understanding of history important?

We see ‘revisionist’ history being taught worldwide. The sadness is that ‘truth’ is only ever written from the perspective of the winners. Thus, no exposure to different points of view or incomplete historical education spanning hundreds of years stymies critical thinking. 

For me, history is not so much about the past as it is about the present. It guides what works and what does not, allowing for more informed choices and decisions, whether in international relations or domestic policies. Lack of education and respect for history are significant factors behind the ongoing failure of both communist and authoritarian regimes. A lack of appreciation for history is visible in South Africa, where the government has learned nothing about developing effective and sustainable policies from the mistakes made by others in the past. In an interconnected world, there is also little understanding of the importance of diplomacy and international relations

2. Toward the end of your book, you write that you think your life chose you, and you spend a lot of time showing the ways in which the forces of history have shaped your life. How has this knowledge of your place in history shaped the decisions you’ve made and the way you see the future?

Understanding my place in ‘history’ has given me a good framework for making decisions. I do not plan for longer than 12 months ahead. However, anything beyond that is unknown. I plan for how I want my children to remember me. I hope that what they see will shape how they live their own lives. At the end of my book, I said I wanted people to remember me as someone who made a difference. That has been a driving force which has given me a sense of purpose and direction. A psychologist once said I make my decisions because of my ‘non-linear’ upbringing. I translate ‘non-linear’ as being exposed to various aspects of life and responsibilities early on and, hence, being able to choose a path I was happy with.

3. Poland of the 1990s faced many of the same questions that South Africa faced at that time – questions like, how to transform a liberation struggle into a sustainable, democratic government, how to adapt the economy to realise meaningful gains? Yet today Poland stands apart from South Africa in various ways. What can we learn from Poland’s democratic era?

The key distinction lies in how Poland’s Solidarity movement, a key player in its transition from communism to capitalism, did not extend its rule beyond the time it was needed. Liberation movements are not well suited to transform themselves into permanent governments as they typically lack the framework to manage an economy. Poland’s economic success can be attributed to its commitment to true democracy. Political parties came and went, with no single party monopolising economic policies for as long as the ANC has.

Poland’s other advantage over South Africa was that its population had access to an exceptional education system and benefits like free healthcare and assured jobs for a period of time. These factors meant that Polish people knew what they wanted to aim for - prosperity. To be fair, South Africa has faced unique challenges that Poland never did, mainly the extreme levels of inequality. However, thirty years down the line, not much has changed, a function of an incompetent government that has never faced credible opposition. That might have been an economic triumph, but it has become a financial collapse.

4. Events of the past five years have underscored South Africa’s complicated geopolitical position – with one foot in BRICS, the other reliant on Western foreign trade and investment. What lessons can we take from grand historical events like the Cold War to help us thread the needle of this fine balance? Is it possible to maintain this balancing act or do we ultimately have to pick a side?

Despite ideological narratives, we have no real ‘skin in the game’ when it comes to aligning with any geopolitical entity. India serves as an example of the success of a non-aligned, non-partisan approach. It maintains open communication channels and a balanced relationship with various global powers.

I recently attended a Saudi Arabia conference where one of the leading US asset managers referred to BRICS as Brazil, Russia, India and China. He truly believed that the ‘s’ in the BRICS is a plural letter and not a country. That is how relevant we are.

Our alliances offer no real benefits for economic growth and are of little relevance globally. Ideological affiliations cannot replace actual prosperity. Unfortunately, the excessive ANC-generated ‘noise’ around these alliances has deterred the flow of foreign investment. We do not ‘punch’ above our weight – we are punching ourselves.

5. In your book, you highlight the exceptional transformations of countries like Vietnam and Cambodia – from a brutal past of oppression to one of economic growth and integration. What can South Africans learn from these countries today? Is there a need to add more such examples in history textbooks?

Interestingly, South Africa and Vietnam enjoy similar advantages and yet Vietnam has been able to exploit what they have, while South Africa is squandering all the opportunities. At the end of the day, it is about the competence of the relevant governments. Vietnam has provided a playbook – all South Africa has to do is follow it.

Vietnam undertook extensive economic reforms in the 1980s, moving to a market-driven economy that attracted foreign investment. South Africa has, instead, scared the same investment through ideological politics, collapsing infrastructure and lack of cohesive economic policy.

Vietnam invested heavily in education, understanding it is key to economic development. Over the generations, South Africa has deprived its population of a functioning education system. This continues today, with the ANC condemning another generation of youth to unemployment.

Vietnam’s growth has been driven by increased exports of manufacturing goods. South Africa has largely failed to diversify its exports beyond commodities. 

Vietnam has focused on infrastructure development. South Africa has destroyed its infrastructure.

Finally, Vietnam benefits from tourism, whereas South Africa continues to underperform due to high rates of crime, negative perceptions of corruption, and a lack of infrastructure.